Making urban road pricing acceptable and effective: searching for quality and equity in urban mobility

doi:10.1016/S0967-070X(01)00024-5

Transport Policy

Volume 8, Issue 4, October 2001, Pages 289-294

https://doi.org/10.1016/S0967-070X(01)00024-5 Get rights and content

Abstract

Urban Road Pricing has been proposed many times as a powerful instrument to fight congestion in urban traffic, but has systematically faced a hostile political envirionment, due to lack of confidence on its promised (traffic) results and fear of its political consequences. Lack of action in this front is contributing to stable or even growing congestion problems in most large cities.

This paper tries to address the problem with a fresh look at the objectives of road pricing and at the reasons for that political hostility. For managing and developing the urban mobility system, efficiency and equity are normally taken as the basic economic objectives. Sustainability objectives may be integrated in the efficiency objective if we are able to represent adequately the costs of the resources consumed in the process. Political hostility is normally based on having to pay for what was freely available, and on the risk of exclusion for those with little revenue available for the extra cost of driving into the city.

Pursuit of efficency leads to suggestion of marginal social cost pricing but this is hard to explain to the public and application of this principle is fraught with pitfalls since some components of that cost get smaller as traffic grows (noise related costs for example). Pricing is still a good option but the objective has to be something easier to understand and to serve as a target for mobility managers. That “new” objective is quality of the mobility system, with a meaning similar to that of “level of service” in traffic engineering, and prices should be managed to across space, time and transport modes in such a way that provision of service is made with good quality in all components.

Pursuit of equity leads to some form of rationing, which has often been associated with high transaction costs and abuse by the administrators. But the use of electronic road pricing should allow easy ways to address the rationing process without such high costs. The basic proposition is that all local taxpayers receive as a direct restitution of their tax contribution a certain amount of “mobility rights”, which can be used both for private car driving in the tolled areas and for riding public transport.

These principles are easily applicable with a variety of technical solutions for road pricing, from the simplest cordon pricing to the more sophisticated “pay-as-you-go” schemes. The paper addresses this question of implementation and argues for increasingly sophisticated schemes, as people get accustomed to the principles and finer targeting of demand segments may be needed.

Section snippets

Fighting congestion with urban road pricing: from economists’ preferences to politicians’ fears

Urban road pricing has long been in the list of preferred approaches by economists to solve the urban traffic congestion problem. The introduction of prices to manage demand of private car access to city centre has been recognised by economists as a powerful instrument (Vickrey, 1963, Button, 1995), and numerous research projects and publications have been dedicated to developing models and showing the expected results of such measures on road traffic saturation levels: Even if we cover only EU

Objectives in the broad picture: efficiency, effectiveness, acceptability

If we consider the arguments put forward by economists in the discussions about this issue of congestion and road pricing as a measure to fight it, the objective of efficiency always comes forward, in most cases associated with prices based on marginal social costs.

If we accept dominance of the efficiency objective, this approach is certainly correct in a theoretical world where all prices would be based on marginal social costs, but creates some risks in the real world where many prices are

Equity and accountability at centre stage of acceptability

Besides efficiency, equity and sustainability are normally taken as basic objectives in the definition of transport policy. Sustainability objectives may well be integrated in the efficiency objective if we are able to adequately represent the costs of the resources consumed in the process, through internalisation of external costs, and this has been shown in the FISCUS project (FISCUS, 2000) to be possible (with some margin for error) in the urban mobility setting, even if relatively poor data

Aiming at quality of the mobility system, based on a mix of pricing and rationing

Congestion pricing is easy to explain, and in fact it is widely applied in many sectors of the economy subject to peaks in demand, like hotels in the holiday season, publicity in TV shows, etc. But in these and other cases, we are dealing with free markets, and price setting is guided by considerations that have nothing to do with equity and fairness.

Transport economists have argued time and again that the search for maximum efficiency in the provision of a scarce resource is achieved by

Conclusions

We have argued that there has been a great divide between economists and politicians about road pricing because the former have adopted a much more restricted set of the objectives than the latter, giving too much emphasis to the issues of efficiency, which are hard to understand and convey to the population, and paying less attention to the more visible aspects of effectiveness of congestion relief and equity.

We propose a wider objective of quality in all dimensions of the mobility system,

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Making urban road pricing acceptable and effective: searching for quality and equity in urban mobility

Abstract

Section snippets

Fighting congestion with urban road pricing: from economists’ preferences to politicians’ fears

Objectives in the broad picture: efficiency, effectiveness, acceptability

Equity and accountability at centre stage of acceptability

Aiming at quality of the mobility system, based on a mix of pricing and rationing

Conclusions

An Equity Analysis of “Pay-As-You-Drive” Automobile Insurance in California

“Equity and Acceptability Questions in Internalising the Social Costs of Transport,” in Internalising the Social Costs of Transport

Road pricing as an instrument in traffic management

Equity and fairness considerations of congestion pricing

The rule of three: a possible solution to the political problem of competing objectives for road pricing

Traffic Engineering and Control